1. Baron Art Mart, Inc. Student Coaching Notes

2. Concepts Covered Statistics Macroeconomics Financial Accounting
Business Law

3. Question 1: Determining Mrs. Kim’s Real Income
Divide Price Index by 100 to Obtain Adjusted Price Index
Divide Gross Income by Adjusted Price Index to Obtain Real Income
Example, For 1991:
Adjusted Price Index = 136.2/100 = Real Income = $50,599/1.362 = $37,150.51

4. Question 1: Descriptive Statistics
Find the Value of and Know the Meaning of:
Mean
Median
Sample Variance
Standard Deviation

5. Question 2: What is a Price Index?
Shows Relationship between Price Level in Given Year and Price Level in Base Year.
The Base Year in Case is Price Index for Base Year is Always 100.
Index of for 1991 Means General Level of Prices Has Risen 36.2% since for Bundle of Goods Purchased in

6. Question 2: Regression Results
Show the Value of and Know the Meaning of:
Coefficient of Determination (R Square)
p-Value for Year
Regression Coefficient for Year
Regression Equation:
Price Index = Intercept + (Coefficient) x (Year)

7. Question 3: Present Value
Present value is a technique that considers the time value of money.
PV allows cash amounts expected to be paid or received at different times in the future to be brought to present day values. Then the amounts can be combined.
If amounts differ over time, calculate the present value of each and add. If amounts are equal each period, calculate the present value of an annuity.
In Finance 303, you’ll learn about net present value and it’s corresponding function on your spreadsheet.

8. Question 3: Projection of income
Do your calculations for question 3 in the following order:
1. Use mean real income from question 1 to determine projected real income for 2006 – 2015.
2. Use regression equation from question 2 to determine projected adjusted price indices.
3. Use projected real income, adjusted price indices, and tax to estimate Mrs. Kim’s net actual income for 2006 – 2015.
4. Determine the present value of the future net cash flow.

9. Question 4: False Imprisonment
Reasonable Cause:
Articulable knowledge of particular facts sufficiently reasonable to suspect the detained person of shoplifting
Reasonable Manner
Reasonable Time

10. Question 4: Reasonable MannerNo
Use of threats
Coercion of customer
Intimidation of customer
Use of abusive language towards the customer
Use of force against the customer
Failure to promptly inform the customer of the reasons for the detention
Detention takes place in public next others

11. Question 5: Future Income Compensation
Goal of compensatory damages:
Make the injured party whole again
Lost future incomes are recoverable:
Nature and occurrence of lost future income must be shown by evidence of reasonable reliability, not mere speculation.
Evidence of reasonable reliability may include reliance on specific statistical models based on past earning records.
Proper measurement of damages is the present value of net future income after taxes.